CALIFORNIA SHOULD LEAD OIL-SHALE REVOLUTION

Last December, Gov. Jerry Brown said a key reason to pursue very costly alternative energy was that America was running out of oil. During the presidential campaign, Republican nominee Mitt Romney’s declaration that he wanted North America to be energy independent by 2020 drew snickers in social media.

Now, thanks to the International Energy Association, maybe we can mothball this ignorance. As a new IEA report notes, the U.S. is on track to surpass Saudi Arabia as the world’s leading oil producer, thanks to improved methods of hydraulic fracturing – aka, fracking – that make it far easier to get to oil shale supplies.

But while this finally sinks in with the public, we’d like to point out something that has barely gotten any media attention: California can lead this energy revolution if its leaders have the foresight to make it happen, creating many tens of thousands of jobs and vast new wealth.

A 2011 federal report on California’s biggest oil shale resource, known as the Monterey Formation, estimated it had at least 15.4 billion barrels of recoverable crude oil. That’s four times bigger than the Bakken formation, where oil drilling has turned North Dakota into an economic dynamo. Our state’s shale resource extends from the eastern edge of Silicon Valley south to Kern County.

On Dec. 12, the federal Bureau of Land Management is set to auction off drilling rights to nearly 18,000 acres in Monterey, San Benito and Fresno counties. We hope Gov. Jerry Brown and state regulators talk a calm look at fracking and its long history. Environmentalists’ griping about fracking’s allegedly huge downside only ramped up when new methods proved transformative for oil and gas exploration.

Unfortunately, lawsuits are inevitable. A lawsuit over the Dec. 12 lease auction has already been threatened. Meanwhile, a much smaller BLM lease auction of 2,700 acres from September 2011 is already tied up in litigation filed by the Center for Biological Diversity.

Even if California’s media haven’t caught on to the state’s potential for a Bakken-style economic boom, the oil industry has. By far the BLM’s biggest 2011 lease was the $180,000 paid for a 200-acre parcel by Vintage Production California, a Bakersfield-based subsidiary of Occidental Petroleum, the third-largest U.S. oil and gas producer. On Oxy’s website, it estimates the shale reserves on California land it already controls to have over 20 billion barrels of potential oil – a claim that the company says is made in accordance with the Securities and Exchange Commission’s rule that only “economically producible” reserves can be cited in SEC filings.

This is a striking development. But will a Bakken West be allowed to benefit Californians? The state, after all, is formally committed to having one-third of its energy come from cleaner but costlier renewable sources by 2020, and is home to a powerful environmental movement.

But the fracking boom is steadily becoming a worldwide phenomenon, and the idea that fossil fuels will fade from the scene seems more preposterous every day. Instead of getting left behind in this new era, the Golden State could – and should – lead the way.